MONETABRIEF - SriLankan Airlines which made a 12.5 billion rupee operational loss, ended up with a 35 billion rupee loss in the June quarter due to the collapse of the rupee, data in a Finance Ministry report showed.
Sri Lanka Airlines revenue had increased to 82.8 billion rupees from 62.6 billion rupees a year earlier amid the Middle East war. Aircraft were diverted through longer routes and some flights were cancelled.
Expenditure had soared 40 percent to 95.2 billion rupees from April to June.
Fuel costs rose 93 percent to 41.2 billion rupees.
The operating loss before exchange losses were 12.5 billion rupees.
"The company's financial performance was further adversely affected by foreign exchange movements," the Finance Ministry said.
The loss before tax was 35.6 billion rupee rupee, up from 12 billion rupees last year.
Depreciation inflates the value of legacy debt creating forex losses.
Central bank depreciation also inflates the cost of lease payments which are made in foreign exchange.
Depreciation and the inflation that follows, also makes air travel less affordable to domestic passengers and they may lose business.
Indian private airlines have gone under in periods of steep depreciation in the past.
Airlines based in countries like Dubai or Qatar (which used Indian rupees in the past but shifted to currency boards as macro-economists carried out the first devaluation in the 1960s) do not face the problem.
Sri Lanka's central bank busted the rupee to 330 to the US dollar, pushing up inflation to 8.3 percent so far.
Unlike in the past the currency collapse in 2026 was engineered by dishonoring notes created by monetizing dollar purchase (actions of the International Operations Department and not Domestic Operations as in the past).
The rupee was debased amid a budget surplus, an excuse the central bank has given since February 1952 for monetary instability created mainly through domestic operations.
Sri Lankan Airlines has received a 30 million US dollar cash injection in May 2026, soon after a 175 million dollar bond was taken over by the tax-payer, a Treasury report showed. (Colombo/Nov06/2026)